Resistant to rising rates, though, does not mean impervious. At some point high borrowing costs will crimp demand. Moreover, the fundamentals underpinning the property rally—the limited supply of new homes—may prove to be, in part, an artefact of the pandemic. Nearly 1.6m homes are under construction nationwide, the most since the early 1970s. The problem is that the housing sector is, like other parts of the economy, suffering from labour shortages and gummed-up supply chains. It is taking longer than normal to complete construction. A resolution of these constraints could move America from a property shortage to a glut.
Resistant to rising rates, though, does not mean impervious. At some point high borrowing costs will crimp demand. Moreover, the fundamentals underpinning the property rally—the limited supply of new homes—may prove to be, in part, an artefact of the pandemic. Nearly 1.6m homes are under construction nationwide, the most since the early 1970s. The problem is that the housing sector is, like other parts of the economy, suffering from labour shortages and gummed-up supply chains. It is taking longer than normal to complete construction. A resolution of these constraints could move America from a property shortage to a glut.
